I went to a Special Needs Planning Workshop for Down Syndrome put on by the Special Needs Planning Center in Kansas City. There are not very many centers that specialize in special needs financial planning and trusts so that in itself was refreshing to see. The Special Needs Planning Center is there to help you protect your child's future by making sure you do so correctly. The founders are also parents of children with special needs so they understand how important proper planning is. Their number one priority is to make sure that all children are protected. Because of that goal, they share a lot of basic information in their workshop that every parent needs to know, like how SSI works, why is important that your adult child receives it and why it is imperative that you do not do anything to jeopardize that essential asset.
SSI Requirements and Restrictions
*The actual requirements and regulations is different in all 50 states so be sure to check your individual state laws. I live in Kansas and this information will therefore reflect their state laws.
Why is it important for your child to receive Disability Benefits (SSI)? Because at the age of 18 our children become emancipated. The age can vary some if the child is still in school, but at the point that your child is completed with their education and is no longer a "full time student" your insurance company will no longer cover their medical expenses. (The definition of "full time" varies from company to company so be sure to know how yours defines it) Children with special needs will not be able to receive medical insurance from anywhere else since they have a pre-existing condition. The diagnosis of Down Syndrome it is an automatic denial, no matter how healthy your particular child has been. Even if you were able to find a company willing to insure them, the premiums would be so high that they would not be able to afford the coverage. Since it is imperative that they have not only the medical coverage but also access to services for housing and other assistance that they will need we need in their adult life we need to make sure they qualify for SSI (which comes with Medicaid) when they are adults.
In order to receive SSI (Supplemental Security Income) the person must not have many assets. In Kansas they can have up to $2000 in assets and in Missouri it is only $1,000. Anything above that denies them access to coverage. So all of these childhood savings account that parents have to help their children with their future would actually harm a child with special needs because that money could keep them from getting medical services, housing and other essential needs.
At this point the speaker strongly suggested that you make sure every family member knows this. Tell everyone in your family to not leave anything to your child in a will. Leaving them $5,000 or 500,000 will actually be harming them, not helping them. Of course, that is what many families do. They leave their money to the grandchild, nephew, etc that they think needs it the most and who needs it more than their relative with a special needs? Unfortunately the way our "system" works means doing what makes the most sense is actually the worst thing you can to do. That is where trusts come in and there are many ways that you can leave assets and money to be used in the care for your child, but you can not simply leave it to them in their name. You must make a special needs trust and you must find someone who actually knows how to do that! A lawyer that they recommend does 120 of these trusts a year (if memory serves me correctly). He recommends you hire an attorney that has done at least 60 of them before trusting them with your assets and money. It is not only important that you seek these protections, it is more important that it is done right.
If anyone lives in or near, or somewhat near Kansas City I highly recommend them going the Special Needs Planning Center. What they do is help get all of your plans ready for the lawyer. This saves you time and money with and assures you that your plans are done correctly. They do not charge for this part of the service. They only make money if you choose to let them handle the financial aspect of your plans and their record and investments are solid. As parents of special needs children they know that money needs to be there for your children. We will talk about trusts more later.
So Back to SSI. Your child can be a part time college student if they want to take some community college classes and can have a job and make up to $900 a month and still receive beneifts. If they make more than that, they will again lose SSI. While I had dreamed of my daughter actually becoming more self sufficient, the facts are that it would be harmful to leave her unprotected anytime she were between jobs. He mentioned one gentlemen who made pretty good money because a very large company hired him, gave him benefits and the works. He made too much money to receive services and was because of that they were not worried about his future. However, the company he worked for had structured his job around his speicific ability and when they had had to downsize, his job has was replaced by a machine. Now this man has a 10 year work history and is therefore going to have trouble receiving benefits for his future. His Cobra will run out after 18 months and he will be left with no health insurance. While I would love my daughter to have the opportunity to support herself fully like this young man did, I now realize that may not be the best route to take. Who will be looking out for her when she can no longer work and mom and dad are no longer alive to look out for her? We need to start thinking about these things now.
They recommended signing your child up for SSI as soon as your child turns 18. If you wait a whole lot longer than that you start getting questions as to why. Did you think they could work? Did you think they could support themselves? They sometimes make it more difficult for you if you wait too long. At the very least, you should file for it when they are no longer a full time student.
In Kansas there is also another benefit that he recommends that you have. It is called an HCBS Waiver or sometimes referred to as the Waiver Program. Call and get your child on the waiting list for this if you do not already have it. If they do not get this before they turn 18 they will not get it at all. This waiver allows them to receive life skills services and other benefits that will get them out of the home as an adult. It also encourages an organization to place your child because they are getting extra funds. If you have one bed open and two applicants they are going to the want the one that has the waiver.
We had personally opted out of the program because we have to sign a document making the case manager my daughter's advocate. I have a huge problem allowing anyone other than my husband or myself be my daughter's advocate. They would come into our home once a month for an interview to "check on her." I did not like that. I found out that they are only advocates for her benefits and nothing else. I also found out that if I do not want home visits, I do not have to have them. I called this morning to get back on the waiting list. The application is in the mail. I hope I am not too late.
This is a really hard decision for us because we believe in self-sufficiency with as little governmental intervention as possible. We celebrated when we lost SSI due to our income, because we wanted to provide for ourselves. Unfortunately since the "system" does nothing for persons with special needs who are not in that "system" I have to get my daughter in that "system" whether I like it or not. If she is incapable of providing for herself due to no fault of her own, what are we to do? I am not a socialist by any means, but if a society is going to provide for someone, it should be for those who are incapable of doings so themselves. No one fits that description better than those who have special needs.
The speaker made one particular statement that I love.
"If you don't have a transition plan for your child the government has one for you."
The most important thing you need to have down in your will is who your child goes to. You need to have someone in place that will take care of your child's needs and knows your wishes for your child's future. He also offered another important piece of advice.
How true that is!! And what a scary thought! The government does very little right and even less well. I certainly want my daughter's future protected, especially after I am gone. We need wills! Remember though, a child with special needs can not have assets so for us a will is not about what we leave them, simply about who they will go to. We need to use trusts for the rest of it.
Does your child have any idiosyncrasies? Our children have special needs and there are certain things they like done in certain ways, certain physicians we want them to see, certain ones we do not want them to see. Certain therapies, programs, and activities they are involved in. You know all of this and sometimes even your spouse knows it too. What happens when we pass away? They recommend that you keep a written blueprint to give the next guardian. Update it regularly as things change. I think that is a great idea and I will be working on mine this week! Be sure to let the future guardian know about the plan and where it will be kept if something comes up and they need it. This brings us to guardianship.
Guardianship or Power of Attorney
When your child turns 18 they are emancipated and become their own person. They make their own decisions on all things, parents are no longer responsible. At this point you will want to determine whether you want to file for guardianship or simply be their power of attorney. The difference is simple, yet vital.
Power of Attorney helps them make decisions.
Guardianship allows you to make decisions for them.
Which one you need will depend upon how well your child is doing at 18. Sometimes a person may still need a guardianship at 18 but by 30 or 35 may be more capable of taking on some of the decision making process. You can give up guardianship later if that happens and you can even have limited guardianship where your child can make their own medical decisions but you still have guardianship over their finances, etc. There are 2 very important questions that he recommend you ask yourself when determining whether or not you need guardianship.
1. Can they make good financial decisions?
2. Can they make good medical decisions while under duress?
If they can not make good decisions in these areas then he recommends getting guardianship. It will also protect against other issues. He shared some horror stories about the possibility of predators. Unfortunately that is a real concern. A man befriends a special needs young woman, tells her he loves her and then one day takes her away across state lines, marries her and then basically spends her monthly check while giving her very little to live on an no real care. What people will do for $600 is frightening! Anyway, one family hired an investigator and when they found their daughter they snatched her back. The fact that they had guardianship over their daughter kept them out of jail for doing that. If they had only a power of attorney there would have been nothing they could do! I never even dreamed I would have these sorts of things to worry about. That's some scary stuff! (Guardianship will allow you to make every decision for your child except whether or not they marry and have children.)
In your will you will pass on guardianship of your adult child just like you would custody of a minor child, so your child can still be protected when you are gone.
Then he went into special needs trust. You can put anything a trust.
When your child is on SSI they are only allowed $36 a month spending money! The amount may vary from state to state but the point is, your child is going to live a boring life if someone is not looking out for them. Not only will it be boring but it will become inactive and because of that weight gain and other medical problems can set in.
There are creative ways the trust can be used to insure you child has a decent quality of life. One family has left funds to make sure that their child gets 4 season tickets to the Kansas City Chiefs every year. This allows their child to see every Chiefs game. It allows him to take friends so he has social interaction. But it also helps to assure he gets good care but every case worker will want to be nice to the man who has to share a chiefs ticket with their sponsor!
Some people leave their house to be used by an organization that will turn it into a community living home that their child can remain in. The trust gets to approve who lives with their son and can pull the home back out if the organization is not offering good services. This is really beneficial for children with autism and other special needs that have trouble adjusting to change. You can assure that your child will always live in your home if you own it!
There is so much more, but those are the highlights of what I learned in an hour and a half. Again I recommend talking to someone who knows about special needs trust to put these plans into action. For that I believe that the Special Needs Planning Center is a great place to start. The fact that I would trust them with my daughter's future is saying a lot!